The World Bank Armenia Social Protection Administration II Project (P146318) REPORT NO.: RES37169 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ARMENIA SOCIAL PROTECTION ADMINISTRATION II PROJECT APPROVED ON MARCH 24, 2014 TO REPUBLIC OF ARMENIA SOCIAL PROTECTION & JOBS EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Mercy Miyang Tembon Senior Global Practice Director: Michal J. Rutkowski Practice Manager/Manager: Cem Mete Task Team Leader: Ivan Drabek, Marina Petrovic The World Bank Armenia Social Protection Administration II Project (P146318) I. BASIC DATA Product Information Project ID Financing Instrument P146318 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 24-Mar-2014 30-Nov-2020 Organizations Borrower Responsible Agency REPUBLIC OF ARMENIA Ministry of Labor and Social Affairs,Ministry of Finance Project Development Objective (PDO) Original PDO The proposed Project Development Objectives (PDOs) are to (i) improve social protection service delivery and (ii) strengthen analytical and monitoring and evaluation functions of the agencies delivering social protection benefits and services. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-53980 24-Mar-2014 23-May-2014 29-Oct-2014 30-Nov-2020 21.20 6.62 12.72 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Armenia Social Protection Administration II Project (P146318) Project Status: Progress towards Achievement of the Project Development Objective (PDO). The project shows moderately satisfactory performance on progress towards the PDO. The project has three indicators to measure the development objective. Of those, two are ontrack to be achieved and one is lagging. Client satisfaction with benefits and services received through existing ISPCs is at 89 percent and is on track to reach the end target by the closing date of November 30, 2020. Progress on the PDO indicator of increased monitoring and evaluation capacity for the social protection (SP) programs is notable with monitoring passports and indicators for all SP programs developed. Integration of these core project outputs in the regular operations of the Ministry of Labor and Social Affairs (MLSA) has contributed towards partial achievement of the PDO. The client participation costs of receiving benefits and services (for the Family Benefit Program) is expected to decrease once the majority of Integrated Social Protection Centers (ISPCs) become fully operational. It has been proposed that this indicator is included in the Integrated Living Conditions Survey implemented by the National Statistical Office. Assessment of the Implementation Progress. The project’s implementation progress is rated Moderately Satisfactory. During the first two and a half years of the project, there were substantial implementation delays due to slow implementation of civil works activities under Component I (which covers 68 percent of the credit) and the previous Government’s decision not to implement activities under Component II. Significant progress had been recorded in the project implementation since the mid-term review in September 2017, particularly with regard to the roll out of the functional social protection integration model, however the project implementation slowed down again over the last six months due to the recent elections and issues related to closing down of the Foreign Financial Projects Management Center ('FFPMC'). The works on 7 Integrated Social Protection Service Centers (ISPCs) have been completed, civil works are ongoing for 2 ISPC and 2 additional are at the procurement stage. Credit disbursement increased to 34.2 percent. The project was restructured once. A 23-month extension was granted in September 2018 to provide sufficient time to complete the civil works for remaining ISPCs and make them operational. Another restructuring will be carried out in FY20, to perform needed adjustments in project activities and related intermediate result indicators. Proposed changes: This proposed restructuring is in response to the request from the Ministry of Finance of the Republic of Armenia (MoF) dated April 1, 2019 (enclosed). The request is to replace the FFPMC as the project implementing agency under MoF responsible for functions with the newly created Project Implementation Department ('PID'). The PID is the new name of the same implementing agency which has been subject to organizational changes for absorbing the subordinate project implementing unit (PIU) within the structure of MoF. The proposed amendment does not entail any other changes to the project. The project team re-assessed the financial management and procurement arrangements, and concluded that the capacity remains satisfactory. The financial management arrangements under the project are adequate and acceptable to the Bank, and there are no overdue audits under the project. II. DETAILED CHANGES